Guidance for Intra-Entity Transfers of Assets Amended
Providing relief for reporting the income tax consequences of an intra-entity transfer, the Financial Accounting Standards Board (“FASB”) just issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Per the Update, a company must disclose in its financial reporting the income tax consequences of an intra-entity transfer of an asset when the transfer occurs. This is a change from existing GAAP, which does not allow the recognition of current and deferred income taxes for such transfers until the asset is sold to an outside party. The standard does not introduce new disclosure. Read More.
Results from April 18th Revenue Recognition TRG Meeting
Earlier this week, the Revenue Recognition Transition Resource Group (“TRG”) held a meeting to discuss the issues regarding the implementation of Topic 606, Revenue from Contracts with Customers, and International Financial Reporting Standards 15, Revenue from Contracts with Customers. Staff members and the TRG agreed on the following matters: Memo No. 50, Scoping Considerations for Incentive-based Capital Allocations. Incentive-based capital allocations are within the scope of Topic 606. Memo No. 51, Contract Asset Treatment in Contract Modifications. A contract asset is sustained in the new modified contract and recognized under the new modified contract similar to receivables, resulting in prospective accounting.. Read More.
SEC to Issue Statement with IFRS Proposal
The Securities and Exchange Commission (“SEC”) plans to publish a statement that affirms U.S. support for international accounting standards convergence, and the SEC’s expectation that U.S. companies’ financial statements will continue to be prepared under U.S. GAAP and not International Financial Reporting Standards (IFRS). Announced by SEC Chief Accountant James Schnurr at the SEC Speaks conference, the statement is likely to be included in a proposal that would allow U.S. companies to voluntarily supplement IFRS information with U.S. GAAP financial statements. No timetable has been set for the publication of the proposal and accompanying statement. More on the SEC’s IFRS statement can be. Read More.
IASB Establishes New Process for IFRS for SMEs
Earlier this month, the International Accounting Standards Board (“IASB”) announced a new process for stakeholders to submit issues associated with the International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs). The new process is the result of a review completed last year and asks individuals or companies to email a description of the implementation issue to the SME Implementation Group (SMEIG) . Upon receiving the submitted issue, the IASB staff will perform the following actions: If the IASB staff believes the issue could meet the criteria under paragraph 15 of the Terms of Reference and Operating Procedures for the SMEIG, the issue will be referred to the SMEIG for consideration regarding. Read More.
Upcoming FASB Proposal Offers Simplified Goodwill Impairment Test
In late March, the Financial Accounting Standards Board (“FASB”) is expected to release a proposal that shortens the goodwill impairment test public companies perform after an acquisition. The upcoming proposal would eliminate the second part of the two-step impairment test that calculates the decreased value amount of acquired goodwill. A one-step process would bring U.S. GAAP more in line with International Financial Reporting Standards and address complaints that the calculation of goodwill impairment is an expensive and unnecessary process. The FASB wants to issue the proposal for a comment period of 60 days.
Will New Revenue Standards on Customer Contracts Impact You?
By: Sara Crabtree , Manager, Government Contractor Services Group U.S. Generally Accepted Accounting Principles (GAAP), as codified in the Accounting Standards Codification, does not provide one, all-inclusive general standard on revenue recognition that applies across the board to all transactions and entities. Companies follow various subtopics in the Codification or industry specific standards to determine the proper procedures for recognizing revenue. That will all change for contracts with customers once new revenue recognition standards go into effect. In May 2014, the International Accounting Standards Board (“IASB”) and Financial Accounting Standards Board (“FASB”) issued new requirements on recognizing revenue that derives from customer-based. Read More.
Topics: Accounting Standards Codification, Accounting Standards Update "ASU", Financial Accounting Standards Board "FASB", International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", Topic 606, U.S. GAAP